Press Release

JCR-VIS reaffirms IFS rating of New Jubilee Insurance Company Limited at ‘AA’ with Stable Outlook

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Karachi, January 23, 2009: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Insurer Financial Strength Rating of New Jubilee Insurance Company Limited (NJI) at ‘AA’ (Double A). Outlook on the assigned rating is ‘Stable’.

NJI enjoys the rank of the third largest non life insurance company in the private sector. Having operated in the market for the last 55 years, the company enjoys significant franchise amongst stakeholders. NJI has pursued a diversified growth strategy with fire and marine segments representing a significant proportion of the business mix while motor has been restricted to about 20%. The company has also taken an initiative to diversify its product mix with the introduction of new products such as crop insurance. As per management, overall business growth level for FY2009 is expected to be robust.

In line with industry trends, NJI suffered underwriting losses on account of riots and unrest in the country towards the end of 2007, causing net claims ratio to escalate considerably. Overall claims performance has improved subsequently, with the company having reported a small underwriting profit for the nine month period ended September 2008. The company has placed greater emphasis on continuous surveillance of underwritten risks. JCR-VIS will closely monitor trends with respect to underwriting performance.

During the 9 months of 2008, liquidity indicators came under some stress, with payments due to claims resulting in cash outflows from underwriting activities, also compounded by rising level of insurance debt. However, by the close of the year, the company was able to curtail the level of insurance debt in line with historic trends. NJI has a diversified investment portfolio, with surplus liquidity channeled towards income funds over the last two years.

The strength of reinsurance program is a key rating driver. Treaty terms for 2009 largely remain similar to the preceding year with re-insurance cover also obtained for crop insurance products.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sobia Maqbool (Ext: 506) at 5311861-71 (10 lines) or fax to 5311873.

Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2009 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited